The Deal That Was a Turning Point for the Self-Driving Car Industry

Just a few years ago, the idea of self-driving cars felt like a sci-fi fantasy, especially to auto executives in Detroit. But thanks to increasingly cheap sensors, the rise of powerful machine-learning technology, and a kick in the butt from the likes of Google (GOOG) and Tesla Motors (TSLA), driverless vehicles are creeping closer and closer to reality.

Now the automakers are aggressively working on self-driving cars while adding more and more semi-autonomous features to their existing line-ups. But they were hesitant to partner with any of the tech companies. The self-driving car industry is moving so quickly that it’s hard to know if a friendly partner will turn into a competitor. (Take Google and Uber: Google’s venture capital arm invested $258 million in Uber in 2013, before Uber decided to work on self-driving vehicles. Now the two companies are poised to directly compete.)

But a big shift came in March, when General Motors (GM) surprised the world by spending $1 billion to acquire a tiny, 40-person self-driving startup called Cruise Automation. That deal opened the floodgates.

In May, Toyota struck a partnership with Uber, Volkswagen invested $300 million in ride-hailing company Gett, Apple (AAPL), which is widely expected to be working on is own car, poured $1 billion into China’s Didi Chuxing, and Google partnered with Fiat-Chrysler to outfit 100 Pacifica minivans with self-driving technology. And those are just the deals from May. Automakers and tech companies are starting to see the benefits of working together.

To learn more about the future of autonomous vehicles, read Fortune’s story, “Silicon Valley Goes to Detroit.”

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